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10/18/2011 @ 6:58AM8,065 views

Google Ventures, Tech Investor Back Company That Aims To Bring DNA Sequencing To Cancer Patients

Brook Byers, the health care venture capitalist at famed tech investor Kleiner Perkins Caulfield & Byers, has been investing in biotech companies for 38 years. He invested in Genentech, the biotech stalwart, in the 1970s, and later on in Applied Biosystems, whose DNA sequencers were used to map the human genome in 2000.

Now Byers says there is a new “crescendo” in life sciences, as the cost to sequence human DNA drops dramatically. And he is putting his effort behind helping to build a new company, called Foundation Medicine, that is aiming to use gene-sequencing technology to help doctors pick the right drugs for cancer treatments with a test that is expected to cost several thousand dollars. “The time is right for this,” Byers says.

Google Ventures is signing up alongside Byers in a $33.5 million series A financing round for Foundation Medicine. Krishna Yeshwant, a medical doctor at partner at Google Ventures, says that Foundation is one of the first companies based on newer DNA-sequencing machines that could have “actual clinical applications that could affect patients.” He and Byers will both serve on the company’s board.

Foundation was founded last April in Cambridge, Mass., by Third Rock Ventures, a venture capital firm that is composed of much of the management team that launched Millennium Pharmaceuticals, one of the first firms to make promises based on DNA-sequencing, back in the 1990s. Millennium wound up becoming successful because of a cancer drug that had little to do with its DNA-sequencing technology, but the executives remained believers in genetics’ potential to change medicine.

The past decade has seen the price of sequencing all of a single person’s DNA fall from several billion dollars to as little as $5,000 thanks to competition between DNA sequencer makers Illumina and Life Technologies. Researchers have talked excitedly about the potential of the $1,000 genome, meaning that when the chemical code of DNA can be transcribed that cheaply it might start to become medically useful. We’re close. Consumer genetics firm 23andMe, which is also backed by Google, has recently launched a pilot program that will sequence all 30,000 of a person’s genes for $1,000. (The genes, which code for building blocks called proteins, are really just 2% of the genetic code. The rest either regulates genes, has some other function, or does nothing.)

The idea behind Foundation is that most genes are still not medically useful. They don’t tell scientists much about health, and most doctors are not prepared to grapple with this new information. But more than 200 of them may help predict what drugs cancer patients will respond to; some cancer centers, including M.D. Anderson in Texas, as working to use DNA sequencing to help match patients to experimental drugs.

Foundation chief executive Michael Pellini says that the company’s goal is partly to get the kind of testing that is already becoming available at academic centers to community oncologists who treat patients.”What we want to do is take this testing to the community practices to treat patients where they live,” he says.

Pellini says that Foundation is already approved under laws called the Clinical Laboratory Improvement Amendments (CLIA) to use its test, and will go into full-on launch mode next year, with a sales force and a marketing campaign targeting oncologists and pathologists. He expects that insurers will pay between $3,500 and $4,500 for the test. Instead of the $1,000 genome, this is the $4,000 0.02% of a genome.

Why pay so much for less? Partly because Foundation will tell you what the results mean, not just dump a lot of data on you. Also, DNA must be obtained from increasingly small tissue samples, called needle biopsies, and thin slices of tissue preserved in paraffin wax. Getting the information is not easy. And doctors are already looking to get more and more genetic information out of each sample. Pellini notes that next year, doctors are likely to be doing ten to fifteen tests on every patient with non-small cell lung cancer. Some drugs, like Pfizer‘s Xalkori and Roche’s Zelboraf, are approved only to work in patients whose tumors have a specific gene mutation.

One early audience for Foundation’s product: drug companies, who are using the test in clinical trials. So far, Novartis and Celgene have signed up.

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Exciting times indeed! Looks like they are using the Illumina platform so remains to be seen how this might affect Illumina’s business model going forward. Should and will they be charging royalties, etc. from FM that is using their products for commercial use? Also, Roche appears to be pushing for more regulation in mandating the use of companion diagnostics, such as their BRAF diagnostic with Zelboraf, as opposed to in-house or other tests (potentially from FM). I wonder whether the FDA (and payors) will eventually decide that all tests are equally informative or if the companion diagnostic will win out?

Boredom and old school. never worked in the past, probably won’t for a few years. It’s not for away, it’s simply not a high margin biz. When your business model is based on sequencing costs, you fall into economies of pennies, cheap labor and outsourcing… Everything that goes against the grain of knowledge based industry. This is why it will fail as usual, until another sequencer comes along, until a new software comes along, until it becomes so mainstream… Also, there is almost no true IP unless discoveries are made, discoveries are usually not into service business model. Finally, how are you going to get FDA approved SOP… even cap sequencers are still waiting 510K approval… Seriously folks, just how often are we gonna see this good ol business model pop up, it bores me to death ! Biotech is dead and it needs a serious kick in the arse… this ain’t it.

I think you will agree with me that to get a sequence, you need to sequence it… At the very core of all these projects (hundreds if not thousands of them since the grand genomic depression) is sequencing technology, it’s a non repetitive buffer and valve application… bioinformatics being the sole brain game in play (but that goes for everything)… seriously, why do people keep inventing stories. Let’s go back to the early 23andme PR hype, let’s take a look at that, now let’s look where they are at ?

The “genetic future is now” mentality, hyped since the 1980s with the idea of finding gene therapy for every human disease, is swinging toward skepticism

The “genetic future is now” mentality, hyped since the 1980s with the idea of finding gene therapy for every human disease, is swinging toward skepticism

Personal genomics is a science in search of an application, not being conservative after such terrible promises is only an other way to make 2012 one of the most difficult year for life sciences. No wonder the public may not want to fund delirious genomic projects… At least, this baby is 100% private… Oh wait, it’s backed by this nimble hot young company called google…

“Consumer genetics firm 23andMe…has recently launched a pilot program that will sequence all 30,000 of a person’s genes for $1,000.” What I understood is that they are offering just your exome sequence — just the 1% or so that are coding genes as opposed to the full genome — for that $1,000 pricetag. No?